Income Tax Return Deadline Missed? Here's What Penalties and Problems You May Face

Income Tax Return 2025: September 15, 2025, marks the last date for filing your ITR for Financial Year 2024–25 (Assessment Year 2025–26). If you fail to file your return today, you still have the option of submitting a belated return by December 31, 2025. However, this will come with penalties, interest charges, and loss of certain tax benefits.

Penalties for Missing the ITR Deadline

If your annual income is above ₹5 lakh, you will have to pay a ₹5,000 penalty while filing a belated return. For those earning below ₹5 lakh annually, the penalty is ₹1,000. In addition, the Income Tax Department may levy interest at the rate of 1% per month on the pending tax amount until it is cleared.

Loss of Key Tax Benefits

Missing the due date doesn’t just mean penalties; it can also cost you important financial benefits:

• No Carry Forward of Capital Losses: If you have incurred a loss on shares, mutual funds, or property, you cannot carry it forward to offset future gains.

• Loss of Exemptions and Deductions under Old Regime: Those filing under the old tax regime may lose access to several deductions and exemptions if they miss the September 15 deadline.

Delay in Refunds

Another disadvantage of late filing is that your tax refund will be delayed. Timely ITR filing ensures faster processing and quicker refund credit directly into your bank account.

Impact on Loans and Credit Applications

Experts warn that late filing can also impact your loan approvals. Banks and NBFCs generally require ITR copies from the past three years when processing applications for home loans, car loans, or personal loans. If your ITR is delayed, your loan application process may face unnecessary hurdles.

Technical Glitches and Calls for Deadline Extension

Many taxpayers and chartered accountants reported issues with the Income Tax e-filing portal, including difficulties in downloading Form 26AS and AIS. Due to this, there have been demands for an extension of the deadline. However, the Income Tax Department has not made any official announcement regarding an extension so far.

Previous Filing Trends

Last year, 7.28 crore ITRs were filed by July 31. This year, as of September 14, 2025, only a little over 6 crore returns had been filed. With more than 1 crore returns still pending, experts are watching to see whether the government announces an extension.

Final Word

Filing your ITR on time is not just about avoiding penalties—it protects your financial record, helps secure loans smoothly, ensures faster refunds, and preserves tax benefits. If you haven’t filed yet, it’s best to act immediately rather than wait until the belated filing window.